Brand positioning is hopelessly outdated. Time to move on.
Brand strategy has always been a critical vehicle for the delivery of business strategy. Yet as business strategy has evolved radically over the last 50-60 years, the foundational concepts of brand strategy have essentially remained constant.
Today most marketers and brand practitioners still focus on positioning as the basis of strategy. An approach that while more sophisticated today is not fundamentally different from what our grandparents were doing in the 1960’s.
As a result, brand strategy has become increasingly disconnected from business strategy, meaning we must urgently consider how to re-connect them and update our approach to again deliver what businesses need.
This means shifting the emphasis of brand strategy away from defending a position toward an embrace of constant renewal along the arc of purpose.
Brand Positioning: Delivering 1960’s business strategy.
Brand positioning is one of the most enduring concepts in business. It created untold billions of dollars in value and dominates the way most people think about brand strategy. It's also hopelessly outdated.
Brand positioning exists because it was a means of delivering business strategy in the 1960’s. A time when business strategy was an emerging field, drawing heavily on military concepts for inspiration. The result was Corporate Positioning; a planned approach to the deployment of corporate assets toward a defensible position. One able survive an attack from the competition and thus create an enduring competitive advantage. The literal equivalent of arraying your troops upon a hill prior to a battle in order to ensure an advantage in the ensuing fight.
Against this overarching strategic framework, the idea of taking a unique position in the mind of the customer that could then be defended against all comers was both a perfect fit and genius salesmanship on the part of the advertising executives selling it. By utilizing the scale opportunities of newly emerging advertising mediums corporations could dominate access to customer attention in much the same way they sought to dominate access to production and distribution. All with the goal of building a defensible a position.
And it worked. Probably better than anyone could have anticipated. First, because of how successful these emerging advertising mediums proved to be at shaping perceptions, and second because controlling information flow via media-spend was very hard to compete with – only those with the deepest pockets could do so consistently, thus erecting a huge wall from which to defend against attack.
Fast forward to today: Strategy equals purpose plus constant renewal
Between the 1960’s and today, the dynamism of business strategy has rendered it completely unrecognizable compared to 1960’s Corporate Positioning. Coming from the fields of both consulting and academia, we've seen the rise (and fall) of strategies based on core capabilities, on industry dynamics, on process re-engineering, on stars, dogs and cows, on national competitiveness, on profitability, on technology, on globalization, on networks, on platforms, on culture, on data, on leadership traits and more.
Today, the consistent backdrop for strategy is a global economy that is moving ever faster, where the cost of doing business has dropped (sometimes precipitously), where customers are incredibly informed, and where the impact of disruptive and highly democratized technologies is real. It’s a world where the idea that competitive advantage can be sustained by doing the same thing over time, no matter how efficiently, has disappeared forever. This means the basis of business strategy has largely become one of constant renewal – the ability of the organization to consistently innovate and create new value, even as existing sources of value disappear.
This demand for renewal creates an equally urgent question: Upon what basis should we choose to renew? Leonard Sherman, in his excellent book “If You’re In a Dogfight, Become a Cat!”, states that this should not be limited to a goal of increased shareholder value. As he notes, when shareholder value is the goal then the tendency is to over-emphasize short-term financial engineering at the expense of the health of the organization. Instead, he suggests viewing shareholder value as an outcome rather than the goal. Increased shareholder value becoming an outcome of getting other things right, rather than the sole driver of decisions being made.
His view, which I agree with, is that the organization should instead set a goal of delivering against a core purpose that is focused on creating value for the customer.
Put simply, if the market demands the dynamism of constant renewal, then the organization requires the anchor of a common purpose from which to set the direction for that renewal. And if we get this right, then we free ourselves to innovate and continuously renew along the arc of our purpose.
As an example, take Amazon, one of the world’s most successful businesses and one that is demonstrably in a state of constant renewal. In his 1997 letter to shareholders (and every year since) Jeff Bezos stated the philosophy underlying the company. Notably, he placed a relentless focus on the customer at number 1 rather than shareholder value. By viewing shareholder value as the outcome rather than the goal, he freed the organization to successfully innovate and constantly renew along the arc of its purpose. Pushing into areas that were unimaginable in 1997, and yet completely consistent with the direction of the organization.
So, if a combination of purpose and constant renewal have become the touchstones of modern-day business strategy, then how should we re-think brand strategy as a means of delivery?
Below are five factors that need to be considered:
1. Purpose = offensive. Positioning = defensive.
The fundamental problem with brand positioning today is that market dynamism renders its focus on defense useless. You position relative to today’s competition from which you then defend. And when competition or market dynamics change, and your position no longer appears to be defensible, then you must engage in re-positioning. Over and over again. A process which often serves as nothing more than a costly way to sow confusion among people both outside and inside of your organization.
By contrast, while positioning is established relative to your current competition, purpose has no basis in your competitive set at all. Instead, it reflects a long-term vision of unique value creation for your customer. This makes purpose an offensive rather than a defensive tool because it states the direction in which you are headed and not the thing you need to defend. Which means effectively renewing your business along the arc of your purpose will force others into defensive maneuvers rather than the other way round.
The importance of removing competition from the underlying definition of your brand cannot be underestimated. Instead of defining your brand by what the competition is doing, you instead seek to establish a clarity of meaning based on the purpose that sits at the heart of your organization.
2. Purpose & constant renewal require a system, not just a story.
Brands as stories and brand storytelling are in vogue right now. But as much as great brands represent compelling stories, storytelling alone is not enough to support the reality of delivering on a purpose plus constant renewal approach to business strategy.
The meaning of your brand will be shaped by the sum of the experiences that you create. The way leadership acts, the nature of your internal culture, how employees are treated, your CSR and environmental policies, customer service interactions, product experiences, innovation pipelines, approach to design, pricing, partners, sales-force, marketing activities etc. all act as signals to society of what your brand means and thus how people should relate to it.
This means we need to view brand in systems rather than storytelling terms. If your corporate purpose acts as the guide, then your brand must act as the OS for decision making. Internally driving decisions that result in a cohesive sense of constant innovation and renewal along the arc of your purpose, and externally reinforcing the meaning behind this purpose in every interaction your customer has with you.
3. The inside matters as much as the outside.
Corporations are cultural constructs. They reflect a society of people that are driven by cultural norms. It is these cultural norms that drive the decisions that get made. Take Apple and Dell for example. Nominally, these two brands compete against each other to sell us computers, yet the products themselves are quite different in look, experience, and emotional resonance. The decisions being made by Apple around using design to integrate hardware, software and services would never be considered at Dell in the same way that the decisions being made about hardware customization by Dell would never be considered at Apple. These aren’t just rational choices made through market analysis, these are human and emotional choices that are deeply embedded into the purpose and sense of self of each of these corporations.
When brands were focused on positioning themselves against the competition through communications, rather than focusing on the purpose driving their business, then this underlying sense self was of relatively little importance. However, as business success has become dependent on your ability to create value through constant renewal along the arc of your purpose, then how you shape the culture and society of talent that is expected to execute that constant renewal matters very much indeed.
Only if this culture is shaped and managed in line with your purpose will the effect on the customer be meaningful. With a clarity of culture and behavior comes clarity of decision-making, which creates clarity of meaning, whereas purpose disconnected from culture just creates confusion.
4. Cohesiveness matters more than consistency.
Brand consistency is a long-lived mantra. Consistency of look, of message, of voice, of design, experience and of product. Brands like McDonald’s or Coca-Cola or Disney successfully took this drive to consistency toward its apogee in their global expansions of the latter half of the 20th century.
Yet if we are focused on the dynamism of constant renewal required by the modern world, then rigid consistency simply becomes a drag in our ability to execute. The pursuit of consistency serving to hold us back rather than push us forwards.
Rather than consistency, we should instead pursue brand cohesiveness: Instead of rigidly consistent design around the world, we should look toward the creation of rich systems of differing, yet cohesive, design. Instead of consistent and singular messages, we should aim for a rich array of different, yet cohesive, messages. And instead of rigidly consistent products, we instead should look toward the creation of a rich portfolio of different, yet cohesive, experiences.
As consumers, we’re more sophisticated today than we’ve ever been. The constant marketing assault we are under means consistent messages on constant repeat simply don't cut-through. They bore us.
Put simply, rigid brand consistency is an anathema to the successful pursuit of a business strategy derived from purpose plus constant renewal. Instead, we must focus on the power of being varied, yet cohesive.
5. Brand value depends on being an umbrella for change.
The standard frame for brand valuation rests on the calculation of the future cash-flows that we can attribute back to the brand. The most common way this is derived is to look for the impact of the brand on factors such as margin, loyalty, and customer preference.
However, within an environment defined by purpose plus constant renewal, we must add another factor to how we view the value of a brand: Namely, how strongly does this brand act as an umbrella under which we can do new things and quickly gain market acceptance?
What do I mean by this? Well, let’s look again at Amazon. The Amazon brand is a very successful example of the value of a strong umbrella. Under it, Amazon successfully expanded physical retail of books into physical retail of pretty much everything. They moved into digital media, started publishing their own content, built their own array of technology devices, created an own-brand line of essentials, established a platform for other retailers, and built an infrastructure business that leads the world in cloud computing.
And while there were a few failures along the way (remember the Amazon Fire Phone?), the simple fact is that when Amazon does something new, the world pays attention. The Amazon brand acts as a powerful umbrella to the new activity making customers more likely to try it, trust it and continue to want to experience it if they like it (whatever it might be). And the interesting thing is how self-reinforcing this process becomes. Because we expect Amazon to do new things, and because we generally like the new things they do for us, then we’re much more likely to accept another new thing when they create it.
Brand positioning has had a good run, but it’s time we put it out to pasture. Like other icons of the 1960's, it just doesn’t do enough today to deliver on the dynamic realities of modern-day business. Instead, we should focus on the connection of brand strategy to organizational purpose, and the ability of our organizations to constantly renew along the arc of this purpose.
Thus crafting brand strategies that reflect a system for guiding decision making internally in order to become an umbrella for cohesive meaning externally, all while being driven by a constantly renewing set of experiences.